NYSE$TALO

Talos Energy Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Announced second quarter 2022 operational and financial results.

Talos Energy reported a strong quarter with rapid debt reduction, record-breaking revenue, and cost control efforts, achieving the lowest leverage multiple and highest liquidity in the company's history.

  • Production of 65.4 MBoe/d (67% oil, 75% liquids).
  • Revenue of $519.1 million, driven by realized prices of $108.03 per barrel for oil, $37.79 per barrel for NGLs and $8.00 per Mcf for natural gas.
  • Net Income of $195.1 million, or $2.33 Net Income per diluted share, and Adjusted Net Income of $100.6 million, or $1.20 Adjusted Net Income per diluted share.
  • Free Cash Flow (before changes in working capital) of $134.1 million.

Headline financials

Total Revenue

$519M

Previous: $304M+70.9%
EPS (adj)

$1.20

Previous: -$0.01+12100.0%
Adjusted EBITDA

$251M

No prior period
Adjusted EBITDA per Boe

$42.13

No prior period
Capital Expenditures

-$128M

Previous: -$126M-1.8%
Free Cash Flow

$67.1M

Previous: -$252M+126.7%
Net Income

$195M

Previous: -$126M+255.1%
Operating Income

$276M

Previous: $93.3M+195.7%
Gross Profit

$519M

Previous: $304M+70.9%
Cash & Equivalents

$108M

Previous: $65.4M+66.0%
Total Assets

$2.86B

Previous: $2.85B+0.4%
Stock-Based Comp

$4.05M

Previous: $3.02M+34.2%

Revenue & EPS history

Talos Energy · Revenue · Quarterly

$519M

Q2 2022+70.9%vs Q2 2021
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Forward guidance

Talos expects to spud the Puma West appraisal well early in the fourth quarter and is closely monitoring recent legislative developments regarding the Inflation Reduction Act.

Tailwinds

  • Initiating operated open water rig program testing high-impact drilling opportunities in the second half of the year.
  • Expecting to spud Puma West appraisal well early in the fourth quarter.
  • Closed the Bayou Bend transaction with Chevron and Carbonvert, welcoming Chevron into the joint venture.
  • Expect to spud the first stratigraphic evaluation well this year to expedite the EPA Class VI permitting process.
  • Actively working with Pemex and its Block 7 partners to finalize the Zama Field Development Plan, targeting submission to CNH latest by March 2023.

Headwinds

  • HP-1 vessel mobilizing to shore for regulatory-required maintenance, resulting in 6.0 – 9.0 MBoe/d of deferred production in Q3.
  • Planned third-party midstream downtime and other miscellaneous planned downtime activities to result in 4.0 – 5.0 MBoe/d of deferred production in Q3.
  • Majority of hurricane downtime impact is typically incurred in the third quarter.
  • Seville exploitation well failed to discover commercial quantities of hydrocarbons in late July.
  • Inflation Reduction Act has not been passed in the U.S. Senate and any final legislation may be different from the legislative text that is currently proposed.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

-0.3%

Avg return

Earnings day

+1.2%

Avg return

5 days after

+3.2%

Avg return

30 days after

47%

18 / 38 earnings

Positive

+19.2%

Q2 2024

Best reaction

-17.0%

Q1 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.8%-7.5%-5.7%
Q4 2025-13.5%-1.8%+26.2%
Q3 2025+2.4%+11.5%+24.0%
Q1 2025+4.4%+14.6%+11.5%
Q4 2024+5.3%-2.3%+9.6%
Q3 2024+1.2%-4.6%-13.4%
Q2 2024+19.2%+18.3%+7.9%
Q1 2024-3.7%-5.8%-18.6%
Q4 2023-0.2%+0.3%+7.2%
Q3 2023-9.4%-8.5%-20.6%
Q2 2023+3.5%+3.2%+3.3%
Q1 2023-17.0%-13.2%+4.4%
Q4 2022-11.9%-7.7%-18.7%
Q3 2022-4.5%-0.0%-9.2%
Q2 2022+8.3%+9.6%+24.1%
Q1 2022+1.4%-10.7%+20.7%
Q4 2021+9.6%+33.1%+28.9%
Q3 2021-2.9%-1.7%-25.5%
Q2 2021-6.9%-2.0%+15.3%
Q1 2021+5.8%+6.5%+38.7%
Q4 2020+1.8%+11.3%-9.8%
Q3 2020-4.7%+9.6%+58.6%
Q2 2020-4.4%+7.2%-8.5%
Q1 2020+3.4%+4.2%+39.0%
Q4 2019-10.3%-1.1%-7.5%
Q3 2019+0.2%-1.6%+5.3%
Q2 2019+3.7%+4.8%+7.2%
Q1 2018-1.9%-3.2%-22.4%
Q1 2019-2.0%-4.6%-22.9%
Q4 2018+11.8%+10.5%+25.4%
Q1 2017+11.8%+12.3%+28.3%
Q3 2018+2.5%-8.7%-21.9%
Q3 2017+2.5%-8.7%-21.9%
Q4 2015-2.8%+0.1%-9.1%
Q4 2017-2.8%+0.1%-9.1%
Q4 2016-2.8%+0.1%-9.1%
Q2 2017-3.8%-8.0%-2.4%
Q2 2018-2.9%-8.0%-8.1%

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